AI’s Energy Footprint: Can Smarter Machines Also Be Greener?
- Jay Boh
- Sep 19
- 2 min read
Artificial intelligence (AI) is often described as the technology of the future, but its energy demands are a pressing issue today. Training and running large AI models requires massive amounts of electricity, and when that power comes largely from fossil fuels, the climate costs add up quickly.
Nowhere is this more evident than in Malaysia, which is rapidly emerging as Southeast Asia’s next big hub for data centres and AI investment.
Malaysia’s Digital Boom
In recent years, Malaysia has secured some landmark digital investments that underscore its growing prominence as a tech hub. In 2024 alone, tech giants including Amazon Web Services, Google and Microsoft, according to InvestKL, committed or expanded investments of US$16.9 billion (around RM74.8 billion) under initiatives aligned with Malaysia Digital and the MyDigital blueprint. Microsoft’s commitment of US$2.2 billion focuses on cloud, AI infrastructure, and establishing a national AI centre, while Google’s US$2 billion investment will fund its first data centre and Google Cloud region in Malaysia. These announcements position Malaysia at the centre of the region’s digital future.
But this rapid growth comes with a heavy environmental price. According to a 2024 study by RimbaWatch, 14 AI data centres in Malaysia — either recently built or in the pipeline — will demand around 2.2 gigawatts of electricity and could generate nearly 9.9 million tonnes of CO₂ emissions annually, given that about 81% of the national grid is still powered by fossil fuels. To put that into perspective, that’s more carbon pollution in a year than the entire city of Kuala Lumpur produces from energy use.
But the story doesn’t end there. While the energy footprint of AI is undeniably daunting, the same technology also offers glimmers of hope — if deployed wisely.
Upgrading the Grid
In response to the mounting demands from AI data centre growth, Malaysia is introducing green energy and infrastructure initiatives to stay ahead. Back in June, Prime Minister Anwar Ibrahim announced a RM43 billion investment through Tenaga Nasional in mid-2025 to upgrade the national grid, Reuters reported. This upgrade is designed specifically to handle increased electricity load from data centres and to integrate battery energy storage systems.
In line with these grid upgrades, Malaysia is also pushing ahead with renewable energy initiatives to ensure its digital boom is matched by greener power. Under the Corporate Renewable Energy Supply Scheme (CRESS), major projects are already underway. In August 2025, Gentari Renewables and Gamuda announced a 1.5 GW solar and battery storage portfolio dedicated to powering hyperscale data centres, The Edge Malaysia reported.
A Critical Juncture
Together, these developments highlight a critical juncture for Malaysia. If grid upgrades and renewable rollouts keep pace with AI-driven growth, the country could position itself as a rare model, a nation that attracts billions in digital investment while also greening its energy mix. But if the energy transition falters, Malaysia risks entrenching dependence on fossil fuels just as the global economy pivots away from them.
Artificial intelligence is neither inherently a climate villain nor a silver bullet. Its impact will depend on how decisively Malaysia — and the world — align digital ambition with sustainable power.
